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Get ready for payroll year end with Xero!

Posted 4 months ago in Xero news by Maria Benjamin
Posted by Maria Benjamin

It’s that time of year again! Over the next few weeks we’ll share some handy hints and tips on how to simplify Payroll Year end with Xero.

We had lots of positive feedback on the changes we launched this time last year, but we’re not resting on our laurels. Take a look at some of the updates HMRC are making for the new year and some improvements to Xero that will save you time and worry during this busy time:

2018/19 Fiscal Year – Updates from HMRC

Income tax thresholds

  • Personal allowance will increase from £11,500 to £11,850
  • UK Higher rate threshold will increase from £45,001 to £46,351
  • Introduction of Scottish Starter and Intermediate tax rates.

National living wage increases

  • National living wage for employees aged 25 and over will increase from £7.50 per hour to £7.83 per hour
  • Additional national minimum wage increases also for those aged 24 and under.

Statutory rate increases

  • £140.98 to £145.18 (Maternity, Adoption, Paternity, Shared Parental Pay)
  •  £89.35 to £92.05 (Statutory Sick Pay)

Employment allowance

  • There’s no change to the £3,000 annual allowance for eligible employers.

Here’s what Xero will do for you

2018/19 Tax Code Uplifts

  • Like last year, Xero will uplift tax codes for employees with codes ending in L, M, and N
  • All other tax codes will be rolled over and can be updated manually if needed
  • W1/M1 values will be cleared down going into the new tax year.

Report Updates

  • P60 reports for the 2017/18 tax year will be made available to you in March
  • P11 reports will also be updated to support the new tax year.

EYU (Earlier Year Update)

  • Submit an EYU for 2017/18 starting 20th April 2018
  • New search feature on the EYU list of employees will be available at the end of February.

Statutory Pay

  • Xero automates calculations for Maternity, Paternity, Adoption, Sick and Shared Parental Pay
  • The statutory rate will automatically increase.

Upcoming improvements in Xero

Early in the new tax year we’ll launch more enhancements that will:

  • Post statutory recoveries to your accounts when you complete a pay run so your finances are accurate
  • Let employees see their P60 report in My Payroll
  • Automatically update employee tax codes for their P6 and P9 notices.


February 22, 2018 at 10.12 pm

I would say WEEKLY SSP rate increase to £92.05?

Maria Benjamin
March 3, 2018 at 3.01 pm

Hi Libby,

Thank you for catching that. We’ve since made an adjustment to the blog!


Noa Bladon
February 22, 2018 at 10.14 pm

Hi, Is there any plan to start including employee expenses and benefits in payroll as it’s very difficult to deduct PAYE and NI otherwise.

Maria Benjamin
March 3, 2018 at 3.07 pm

Hi Noa,

Great question! We’re working on payrolling of benefits in kind, so this would be available for the next FY.


Maria Benjamin
March 3, 2018 at 3.10 pm

Hi Michael,

We’re working on making payrolling of benefits in kind available for the next FY! Stay tuned!


February 23, 2018 at 2.21 am

What about the change is the threshold for student loan repayments???

Maria Benjamin
March 3, 2018 at 3.12 pm

Hi Jennifer,

We’re also adjusting the rates and thresholds for student loans so you won’t need to do anything!


March 8, 2018 at 12.57 am

Will the pension rate increases also be automated?

Maria Benjamin
March 15, 2018 at 2.39 pm

Hi Katy,

The pension contribution rates will be available from Pensionsync to Xero, but you’ll still need to refresh your scheme details. If you’re filing manually, you will need to update the rates directly with your pension provider.


Jan Czerbak
March 28, 2018 at 9.33 pm


Any chance of payroll import (i.e. csv file with hours/rates/employees being loaded into a payrun) – handling an hourly payroll is a very manual process right now. Unless you know of any add-ons that do that already?


Maria Benjamin
March 31, 2018 at 8.52 am

Hey Jan!

Thanks for the comment! Yeah, we’re currently working on an import feature in UK Payroll. If you’re perhaps interested in being a beta tester to provide early feedback, please contact Xero support and they’ll reach out to the product team that will let you know when the feature is ready for beta.


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